The Digital Signage Insider

A new look at the costs of digital signage networks and content

Published on: 0000-00-00

Ever since we posted our original article on budgeting for a digital signage deployment back in 2004, we've gotten calls from all sorts of companies asking why we picked price X or why we didn't include service or feature Y. After updating the digital signage budget in 2006, we took some flack from people who suggested that our estimate was too low, while others thought it was too high. Sigh... there's just no pleasing some people. But here we are again a year later, so I think it's prudent to update our estimates to account for some of the new developments in the industry. And for the first time ever, we'll even try to estimate the cost of content creation, which is probably the biggest question mark in the cost of any digital signage deployment.

Update: Since we write a new pricing article every year, we've created a page that lists all our articles about digital signage budgeting, cost estimates and price guidelines. This is also a handy page to link to if you want to point your friends or clients to our latest pricing data, since we'll be updating the page whenever we add another article in the series.

What's the cost of a typical 100-screen digital signage installation?

First of all, I'm not going to redefine what digital signage hardware, software, installation, and maintenance mean, since most of the visitors to this blog are already familiar with these terms. If you'd like a refresher, our digital signage page has an introduction to the topic along with lots of pointers and links to other blog articles, as do the older budgeting articles linked above. Before we get into any business model specifics or try to estimate the cost of content, I thought I'd start by just re-pricing the items we covered in our 2006 budget:

Cost of a digital sign for 3 years
40" LCD screen $1,500
Player hardware $1,200
Display mount $250
Player software $500
Management software & tech support $1,800
Installation $1,200
Initial project management $300
Total $6,750

Based on these numbers, the cost of deploying a 100-unit digital signage network has dropped a very significant 18% since 2006, mostly due to dramatic price reductions in LCDs. Our $1,500 price point for a 40-inch LCD assumes that you'll eschew the largely-unnecessary 1080p resolution in favor of much less expensive 1360x768 screens, and purchase the three-year extended warranty for a few hundred bucks (it's a wise investment, and probably a necessary one if you're leasing your kit from a third party). While we still recommend professional displays for a lot of deployments, even consumer-grade screens have seen significant improvements, and a lot of customers opt to use them instead. We also adjusted the digital signage media player down $300, to $1,200. Computers keep getting faster, and more manufacturers are experimenting with low power and small form factor designs that can be readily adapted for out-of-home use, so we can reap some benefits from those trends. And finally, we dropped the price of installation by $200, not because ceiling-dropped installations have gotten cheaper, but because we're seeing a much wider range of mounting options on the market, and less expensive endcap, pole-mount, wall-mount and floor-standing displays are getting more popular as people test new business models and deploy to different kinds of venues.

The prices for service components like technical support and project planning have remained relatively static. Just like last year, we continue to find that larger companies still prefer to handle first-level technical support in-house if they already have a service desk in place. If your project needs outsourced first-level support, a three-year service contract for 24x7 support will probably set you back an additional $2,000 - $4,000 per screen, depending on the type of service being provided. I've left the project management cost unchanged at $300 per screen, although we now have more capable service organizations that can offer less expensive options. We've also found that a fair number of companies prefer to utilize their own in-house project management teams to handle the logistics of deployment and installation.

What about content?

As I've said before, content is the single largest unknown cost in a digital signage project, and I'm still astounded by the number of companies who never figure it into the cost of their deployment. Thinking that somebody else -- your venue, your advertisers, a local TV station, or whomever -- is going to provide you with usable content for your screens is dangerously naﶥ, and frequently budget-busting. At the same time, though, I could interview 1,000 agencies and network owners and write a bookshelf full of material on the topic -- and still not accurately estimate how much content is the right amount, where it's going to come from, or what it will cost to produce. Stuck between a rock and a hard place, here are a couple of trends that we've noticed over the past 18-24 months. Take them with a grain of salt, as they probably won't fit your situation exactly, but they might serve as a useful starting place when examining your own budget.
  • Static content can be extremely effective, and it's some of the least expensive content to produce. Estimate a minimum of eight hours for each new screen, which will likely cost somewhere from $250 - $1,000. If your software supports it, consider using dynamic templates so you can make adjustments and even re-use the same creative collateral for several products/announcements/etc.
  • Animation can be eye-catching and powerful, but it can also be distracting. For text-heavy segments, use animation sparingly to draw attention to key elements. A simple Flash animation will take a skilled designer anywhere from a day to a week or more, so budget a minimum of $2,500 for every piece that needs to be created from scratch. Again, use templated areas when possible to get extra use out of your animated assets, and consider purchasing a library of templates and animated effects to cut down on production times and costs. Even brand-centric animations can take advantage of this, since it can be less time consuming to take a template and customize it for a particular brand or message than it is to start from scratch.
  • Talking heads are attractive, but they don't always work on digital signs. Humans put a lot of cognitive effort into processing facial expressions that might be wasted for a short advertisement or information clip. What's more, talking head videos more often than not rely on audio to deliver the real message, which is still taboo in some deployments. But if you're planning to use a spokesperson or talking head in your spots, count on a minimum of $250 per finished second of content when making your budget. The real number could easily be much higher depending on your production techniques and the actor or spokesperson that you hire, but $250/second is a good place to start.
  • Full motion video can be spectacular, but expensive. Use it when appropriate for added visual appeal, but don't count on it to be more effective at selling a product in-store than a more elegant and simple animation would be. Good video designers will know when it's appropriate to use stock art and footage, but when it comes to shooting new video on-location, $1,000 per finished second is a low-end starting point for your budget.
  • Video can have other shortcomings. One particular caveat with doing lots of flashy full motion video sequences is that they're frequently impossible to template and reuse -- because the individual shots are subject-matter specific. Thus, you might wind up producing a larger quantity of unique spots, further driving up the budget.
  • Figure out the number of spots you'll need to produce/acquire before settling on a production technique. If you find you need to create 500 new spots a week, for example, the template-based route might suddenly seem much more appealing. If your advertisers or your host venue plan to participate in the network, give them the option to foot the cost for more expensive production techniques when appropriate.
  • Don't be afraid to mix-and-match. While it's becoming increasingly important for the content on digital signage networks to complement the environment they're located in, you don't need completely homogeneous spots on your screens. In fact, by making all of your clips blend in with each other, you may be reducing the chance that any one of them will stand out enough to engage your viewers. A flashy and eye-catching full motion spot followed by a couple of short animations or still screens can be visually arresting without breaking the bank.
Final thoughts

As our last few articles on the subject have covered in depth, there are other costs that need to be considered, like network connectivity, space rental and leasing fees. I don't feel it's worthwhile to cover them in any additional detail, since they haven't changed much over the past few years. Just make sure you don't forget them when working out your budget numbers. Also, as I've noted in each version of this article, the above numbers are simply an estimate. They don't reflect WireSpring's prices or any other vendor's prices, as far as I know. Instead, they're based on a composite that we've assembled in the course of working with customers and talking to other firms that use competing solutions, or those who have created their own solutions. Your mileage will vary with the size of your network and the products and services that you select. But as we've seen over the past few years, the cost of deploying digital signage continues to decrease, making it less risky for companies to give it a try. Spurred on by global demand, we're rapidly approaching a point where the tangible costs of deploying the hardware and software will take a back seat to other challenges -- such as filling the screens with content and making them effective -- when organizations look at what it takes to run a profitable digital signage network.


Comments   

0 Kishore Jethanandani 2008-01-15 04:25
Nice work. I will appreciate, however,if the units are clearly stated. For static content, you are saying it costs between $250-$1000. Would this be the monthly cost for eight hour screening each day?
Reply | Reply with quote | Quote
0 Bill Gerba 2008-01-15 12:43
Hi Kishore, While costs are going to vary from country to country and even city to city (here in the US, at least), those estimates were on a **per-spot** basis. So I would suggest allocating between $250 and $1,000 for each still image if you're outsourcing the work without some kind of contract. If you have graphic design specialists in house, that would equate to between two and eight hours per finished piece of static content.
Reply | Reply with quote | Quote
0 Stephen 2008-01-15 20:27
I'm not sure what per-spot basis means in this case. What if the ad was part of a 2 minute loop of 12 different ads, so it is displayed every couple of minutes throughout the day for weeks at a time? Also, how does pricing work if the ads are generic in nature (customer sells different brands of same product) versus doing ads for actual brand owners. I have a number of similar questions about pricing. Where else can i dig up info?
Reply | Reply with quote | Quote
0 Bill Gerba 2008-01-15 20:53
Hi Stephen, By per-spot I literally mean per piece of content. In your example with 12 different ads, a spot would be a single ad, so an estimate of $250-1,000/spot would mean budgeting between $3,000 and $12,000 to create that single, 2-minute loop. Getting your content partners to sell you a "package" of hours or deliverables can cut this cost down, as can in-housing the creation. I'm not sure where else you can find budgeting information. The lack of this kind of info is one of the reasons we keep writing blog articles. But if you're most concerned about content production costs, I suggest you get in touch with a local creative studio or two -- there are always a couple of them in every town or city.
Reply | Reply with quote | Quote
0 Yigal Shapira 2008-01-21 16:12
Can you elaborate on the player hardware expense? For 1200$ you can get a very capable computer which you might not need. (especially after observing the hardware requirements of the FireCast OS)
Reply | Reply with quote | Quote
0 Bill Gerba 2008-01-21 16:26
Hi Yigal, First, keep in mind that the above estimate is based on a survey of the industry, and not necessarily what you would pay for our solution. That having been said, $1,200 seems pretty fair when you consider that a) **very bad things** happen when using regular old commodity computers in unattended public spaces, b) the industrial- or military-hardened components that go into many of today's rugged media players are quite expensive, and c) you'll likely want to include other components like a power filter and Ethernet line filter in your hardware costs. So while you can go to Dell and buy quite a powerful computer for $1,200, there's a good chance that out in the real world with no one attending to it it would fail in 18-24 months. A ruggedized media player, while perhaps a bit less powerful than a similarly-priced Dell, pays for itself in reliability and the need for fewer service calls.
Reply | Reply with quote | Quote
0 Stephen 2008-01-21 21:00
Here is a sample scenario of what I'm looking at: I will target small franchise automotive stores. Goal to sell 2 displays per store, one mounted behind the counter (something you'll look at while waiting!)and another strategically elsewhere. Content on the counter display is to flag customers re: things on sale, frequently purchased items they may need, newly stocked items....things the store owner would want displayed. Content on other display is brand specific, so sold to specific companies. So....based on industry survey, it will cost me about $6750 for one installation and for second display I'll quess $2500 = $9250. I have a handle on content creation and costs. In general, in a small venue like this, what can I charge the brand companies who advertise on the one display. And, what do I charge the store owner for ads on the counter display (estimate 15 second ads in both cases)? If you have ideas, fire away!
Reply | Reply with quote | Quote
0 Bill Gerba 2008-01-22 14:32
Hi Stephen, We've done a lot of research on the subject and there's no right answer. Before even considering pricing, though, do you sell advertising now? If not, I urge you to read: [[http://www.wirespring.com/dynamic_digital _signage_and_interactive_kiosks_journal/articles/5 _crucial_steps_that_can_make_or_break_your_digital _signage_project-345.html|5 tips that can make or break your digital signage project]], [[http://www.wirespring.com/dynamic_dig ital_signage_and_interactive_kiosks_journal/articl es/Digital_signage_networks__Advertising_supported _networks-311.html|Digital signage networks: Advertising-supported networks]], and [[http://www.wirespring.com/dynamic_digital_signa ge_and_interactive_kiosks_journal/articles/Can_dig ital_signage_be_profitable_for_an_AV_reseller_or_V AR_-351.html|Can digital signage be profitable for an AV reseller or VAR?]] The first and most important truth that we've learned from watching hundreds of companies in this business is: **if you haven't sold advertising before, your ad-supported digital signage project will likely fail**. First remedy that problem by partnering with an ad sales group or hiring on a professional with lots of past experience and local connections. That having been said, I recommend you take your starting number of $9,250, add in some amount for 2 years of operating expenses, double the entire amount (to account for your profits and the inescapable other fees and charges you'll certainly encounter along the way), divide by the number of ad slots that you will be providing, and use that as your starting number. Also, just because you have a "handle on content creation costs", don't discount that number, and in fact count on it increasing as time goes on. Good luck! -Bill
Reply | Reply with quote | Quote
0 Maurice 2008-02-04 18:40
I have an agreement to install 800 screens at out-of-home locations where young adults frequent. Now I am trying to find a vendor that will provide in-house financing for hardware, software and the cost of installation for a start-up. Any recommendations
Reply | Reply with quote | Quote
0 Luker 2008-02-04 22:15
We are launching a Denver based Digital Media Co. We will be placing 1 screen, 22-25", in C-store, gas stations and we are looking for the best solution to begin this project and help implement. Video and static? We will quickly expand to several hundred locations within the first year. Any ideas on vendors that can help eliminate headaches, and/or probs.? Whats the avg. cost per location? Luker 303-428-6300 office cell 303-960-9060
Reply | Reply with quote | Quote
0 Bill Gerba 2008-02-05 16:24
Maurice: I know there are a few firms out there that will do system leasing for startups in our space (CDW has done it before, I believe), but with no cash flows, etc. it sounds like you might need a small equity financing round to get started first. Luker: I'd stand by the estimates above, though obviously a 22" screen is going to only cost a few hundred bucks, so there will be some savings there. Additionally, for a lightweight panel you'd only need a 1-man install crew, so there might be additional savings there as well. My advice would be to get 10-12 screens out as quickly as possible. Nobody can make a decision based on a single screen, whereas a small network will teach you a lot more about how you'll need to operate your business and give you a MUCH better idea of the infrastructure you'll need to have in place as you get ready to scale. Just be sure to keep at least 12 months worth of extra operating funds in the bank -- it'll take that long, trust me :)
Reply | Reply with quote | Quote
0 Ruben 2008-03-14 21:34
Can we use flash video in your content management software ?What other forms. ?
Reply | Reply with quote | Quote
0 Bill Gerba 2008-03-17 00:37
Hi Ruben, Sure, FireCast supports Flash, HTML, GIF, JPG, PNG, MPEG-1,2,4 (and MP3 audio, of course), as well as lots of AVI and MOV formats, WMV9, and probably a dozen other "minor" formats. I've passed your info along to our sales support guys should you need any additional help.
Reply | Reply with quote | Quote
0 adrian 2008-04-05 03:36
what is the most popular lcd monitor that is currently being used in digital signage applications, i am considering purchasing (50) NEC lcd monitors 46" $2400 each.
Reply | Reply with quote | Quote
0 Bill Gerba 2008-04-09 14:13
Hi Adrian, According to Frost & Sullivan in late 2007, NEC supposedly has 23.1% of the market, Sony 16.5%, Samsung 11.3%, Panasonic 8.5% and the remainder (40.6%) is handled by everyone else.
Reply | Reply with quote | Quote
0 John 2008-06-05 18:46
Interested in finding out what the cost would be for hardware with lets say 26 inch NEC monitor per application. Are the ads sent down by ftp. Monitor, mount bracket, medial player what else. Our application already has the network in place.
Reply | Reply with quote | Quote
0 David Tranter 2008-07-31 19:36
I haven't been able to find much information on two questions that i have. The first is on content creation cost. Who ultimately pays for the creation? isn't this something that ought to be passed on to the company leasing the space. the generic cost of $150/spot/monthis for the company to be given space correct? Also, the second item i've been trying to research is the average or measruable cost for leasing space at a particular venue. Do we offer them a royalty based on sales or a fixed monthy rate? any ideas would be helpful. thanks a ton!
Reply | Reply with quote | Quote
0 Bill Gerba 2008-08-06 14:24
Hi David, The question of who pays is entirely based on your business model. If you're building a private-label network, obviously the brand is going to be responsible for pretty much all of the costs. For an advertising-based model, the approach I've most commonly seen is that the network owner will accept finished advertisements from an agency provided they meet certain criteria. If they don't, they charge to fix it. They'll also charge if the client wants to have new content created (PRN got into this model a while ago, and word on the street is that they're now making some decent money on it). If there's a revenue split between the network company and the host venues, typically that comes with some screen time set aside for the venues. While most venues think they'll go out and get their own content produced, more often than not they turn to the network company for help there too. Depending on how the contract reads, this is either done for free (e.g. as part of the deal), or at some contracted rate.
Reply | Reply with quote | Quote
0 diana 2008-09-03 22:28
I am looking for information on ROI for bank drive thru's. I don't mean the open/close LED's but the message displays that scroll full messages. I have not seen any data on the return. Would you know?
Reply | Reply with quote | Quote
0 Sean 2008-09-14 20:37
I think that Digital Signage is way too expansive for what you get. $7000 for a souped up PC is in today's "Free" Internet age is out of place IMHO. I am happy to see that more and more companies are now offering Free Digital Signage solutions (SaS) Software as a service. Just my 2 cents.
Reply | Reply with quote | Quote
0 Bill Gerba 2008-09-15 19:55
Hi Sean, First, that $7000 includes hardware (screen, player, etc.), software, installation and three years of support. The software component is only a fraction of the total amount. Second, you'll notice that those "free" systems are typically very limited, supported by ads (that you don't control), or, often both. For any network of reasonable size or complexity, you definitely get what you pay for.
Reply | Reply with quote | Quote
0 Guillermo Amtmann 2008-10-06 20:46
Maurice: I agree with Bill, you may need some initial capital, friends and family and a solid advertising sales force.
Reply | Reply with quote | Quote
0 Ediz Burla 2008-12-01 22:41
Dear David, I believe the best way to calculate the video costs is to set the business model a first, whether you're selling media or not. Most media sellers I know is creating an 8 sec. animation video for free of charge. There are some I know charging 250 usd for 8 sec. animation. As you see in this stage your expenses and your competitor's cost will form your pricing strategY. There are some companies calculating the hourly employee wage while some calculating in addition 3 year hardware costs, software costs, partial rent...etc. Such companies set up the video costs according to primary expenses. I hope that would be helpful. Rgs. Ediz Burla TVeez Turkey, VP Marketing
Reply | Reply with quote | Quote
0 Bill Gerba 2008-12-02 13:19
Hi Ediz, That's a very good point, further complicated by the fact that your competition might be global. Here in the US, an 8-sec animation might cost $5,000 (or much more or much less, depending on what you want). But going through an intermediary and having the work outsourced to a low-wage country like India could potentially reduce the cost quite a bit. My estimates above are generally based on what I've heard from content designers and the firms that have made content for my company's own customers. Obviously your mileage will vary :)
Reply | Reply with quote | Quote
0 Ediz Burla 2008-12-02 13:50
Hi Bill, The pricing above should be 2500 usd not 250, my fault. That's correct Bill, hourly employee salaries plays an important role on video projects. Pricing may vary from country to country. David, if your model is selling the media that video costs would be very sensitive. There're some intelligent ways to reduce time and costs of the studio. I recommend you to animate the existing posters, brochures of the client instead of creating a new layout and a new graphic design. It will save you time and money. That would be a good hit for you. If you're interested in I can find you people to give support. You can evaluate the costs of your country and Turkey. It may be a good solution for you in this case. I know lots of people doing it. What do you think Bill?
Reply | Reply with quote | Quote
0 Alex brown 2011-01-02 05:08
What would a price be for 14 by 22 inch screens made for outdoor?
Reply | Reply with quote | Quote

Add comment


Subscribe to the Digital Signage Insider RSS feed


Looking for more articles and research? Our newest articles can always be found at Digital Signage Insider, but there are hundreds of additional research articles in our historical articles archive.


You may also be interested in M2M Insider: our blog about M2M and the Internet of Things.


Questions?  Get pricing  •  Call us at (800) 989-9269 or +1 (954) 548-3300  •  Chat with us online
Copyright © 2016 WireSpring Technologies, Inc. All rights reserved. View our site map, privacy and legal info, and syndication policy.